Brazil Cancels 2016 First Solar Auction, Delaying Second

Solar has taken a back seat this year in the first scheduled Brazil solar auction, The event has been cancelled and will not occur until December.

auction shutterstock_437022328Brazil’s Ministry of Mines and Energy (MME) has announced only hydroelectric energy projects can be submitted to its 1st Reserve Energy Auction, which has also been delayed and rescheduled from July 29 to September 23, pv-tech has reported.

As for the fate of solar, the 2nd Reserve Energy Auction, originally scheduled for October with 12.5GW of solar projects already accredited, will now be held in December for both wind and solar participants.

The deadline for auction registration was reopened and will be August 8th. Hopefully, this will allow more projects to be submitted.

MME said that the changes were made in order to align the completion dates of the solar and wind projects with an analysis of Brazil’s SIN grid. The delays will also give more time for administration regarding the projects that have already been registered.

Minister of mines and energy, Fernando Coelho Filho has already spoken publicly about the need to diversify from just using the auction process for renewables in Brazil. This came after delays and uncertainty around this year’s auctions, which have now been realized.

According to pv-tech, Brazil has held three auctions involving solar during 2014 and 2015, however, the first solar auction in 2014 has already hit setbacks with several major developers asking the regulator ANEEL for more time to complete their projects after following a major slump of the Brazilian currency over the last two years.

The Solar Energy Industries Association states this about the auction mechanism’s workings:

“While the concept of a reverse auction mechanism is not new, it is a fairly new approach for procuring renewables. Where it has been deployed, it has been used as a way to let the competitive market determine the price paid for renewables. This is very attractive to policy makers, as developers are paid a price that is sufficient to bring projects online, but also provide ratepayer protection against “overpayment”.  However this approach does lead to developer risk and uncertainty – as there is no guarantee that the bid and project will be successfully contracted.”

Image via Shutterstock

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